There are several ways to make sure that you will be spending your retirement years, and one which is venturing into real estate ira investing. You are encouraged to discuss your plans with your chosen real estate IRA custodian, and the company will be able to help you come up with plausible strategies to ensure that your new endeavor will be a complete success.
Basic Things You Need to Know About Real Estate IRA Investing
When it comes to acquiring properties such as real estate, IRA LLC account owners should make sure that they know the basic information about getting into real estate IRA investing:
- Any repairs, renovations and other housework that you intend to do on the property can only be done by someone you hire. You have to remember that you cannot do the work yourself to avoid creating or engaging into prohibited transactions; so it is important to find a contractor who would be able to handle the renovations and improvements for you.
- Investment purchases, as well as expenses should come from your own self-directed IRA. Income from your real estate investments should also be deposited to the same IRA. You or your real estate IRA custodian cannot combine 2 different accounts (personal and IRA) together to make sure that you have enough funds for the investment.
- Any real estate – IRA LLC acquired cannot be used for personal gain; you and members of your family cannot live in the said houses, nor can you give them as gifts. This means that you only get to use the properties as investments. Another thing that you should keep in mind is that you cannot have a certain group of people to manage all the real estate investments that you have acquired. This is why you should hire a property manager to help you out.
List of Disqualified Persons:
- You – as the owner of the IRA plan
- Any member of your family
- The IRA custodian or the Administrator of your IRA Plan
- Any person or group who provides services to the plan
- A corporation, partnership, an estate or trust which you directly and even indirectly own at least 5o%
- An employee or an officer, even a shareholder who owns at least 10% of a corporation, partnership, estate or trust
Top Benefits of Real Estate IRA Investing
Through investing on real estate, IRA LLC, especially when self-directed, gives you freedom to save up for your future retirement and, at the same time, reaps the following benefits:
- Hold on the property is unlimited
- You have the opportunity to really earn and save more money through your real estate income. The money that your property will earn will be deposited into your IRA
- You have a wide range of choices when it comes to real estate investments that you would like to venture into: from foreclosures, to mortgage pools, to raw land and residential homes.
- Gains are tax deferred or tax-free for a Roth IRA.
Real estate IRA investing will allow you to plan for your future and ensure a financially stable retirement.